ASIC's public hearing underway

The first public hearing of the Senate Inquiry into the performance of ASIC is currently taking place in Sydney.

ASIC chairman Greg Medcraft opened the hearing Wednesday morning, talking through the four submissions the regulator has made defending its position and actions.

Medcraft said ASIC was grateful to everyone who gave up their time and effort to make a submission, particularly those who suffered serious financial hardships.

But he said “no financial regulator can prevent all losses from occurring” and removing the risk of loss would decrease economic growth and involve intrusive regulation.

ASIC works proactively to identify market problems by using insider intelligence, considering every complaint made to the regulator, using formal source of intelligence, conducting surveillance and sectorial health checks, said Medcraft.

Among his comments, he noted that one of the disappointing factors from the submissions were inflammatory criticisms made against ASIC staff.

“We have exceptional employees who work for the good of community.”

But during his introductory speech, Medcraft was told off by the chairman for going over time, who noted there were only three hours of the public hearing today that Medcraft could attend.

A further eight groups will speak throughout the day, including unions and representatives from the financial planning and accounting sectors.

The hearing will continue in Sydney on Thursday, with the final hearing in Canberra set for Friday.

The inquiry received over 400 applications from members of the public and representatives of the finance industry, including a number of advisers.

It will analyse a number of aspects of ASIC’s performance, including the regulator’s complaints management policies and practices, accountability framework, collaboration with other regulators and any barriers that may be preventing it from fulfilling its responsibilities.

The reporting date for the inquiry is 30 May, 2014.

Yesterday afternoon, ASIC released guidelines for whistle-blowers. ASIC's handling of whistle-blower complaints against the CBA's advice arm, Commonwealth Financial Planning, helped prompt the inquiry in the first place.

The new information sheet lays out who is counted as a ‘whistle-blower’, what protections are available by law and how ASIC will deal with those who put their jobs on the line to provide valuable and sensitive information.

ASIC said it values “all information that members of the public give us” and realises that whistle-blowers often get involved in “difficult and stressful circumstances”.

One former ASIC and JP Morgan employee made a submission to the Senate Inquiry claiming that ASIC ignored him when he told of alleged malpractice within JP Morgan.

Practices included misleading reports being provided to head office and trades not booked into systems and only being tracked by paper-based legal agreements – which would be torn up if required, therefore leaving no trace, alleged the man, who worked within the team that regulates Australia’s stock exchange.

ASIC should be ashamed. For all those whose serious complaints fell on deaf ears. What a pity that the robbers are getting away with white collar crimes, while the innocent swap their productive lives for a 'TO DO' tray on an ASIC investigators desk, that never gets 'done'...

Sack these boys and let's get Australia working for the good of all and not just for the few who know how to play the corporate law to their advantage because 'no-one' is regulating them. That's right, no-one.

James Howarthon
20/02/2014 10:05:34 AM

Greg Medcraft agrees that ASIC can not stop loss to consumers.

Why impose costs on consumers and the industry when, ASIC by Greg medcrafts admission can not stop loss.

ASIC should have their jurisdiction reduced to investment products only.

Advice needs liberating.

hesretoon
28/02/2014 6:36:52 PM

I so agree James. ASIC admit they cannot handle consumer complaints or stop losses, so they do nothing. Why then is our tax dollar of $450 million go to a regulator that admits they can't do anything for us? Maybe because Mr Medcraft needs another overseas trip..We're over it ASIC.